MDA Space Ltd T.MDA

Reason for the friday pop

[Charley33]

Globalstar filed a 8K this morning, no press release, stating that it has entered into an agreement to build a new US$1.5 BB satellite constellation for mobile use. Apple is going to pay Globalstar US$1.1 BB for the satellite build directly and purchase a 20% stake for US$400 MM of a subsidiary and the proceeds will also be used for the constellation build and to retire US$219 MM of debt. 
 
Globalstar will own the satellite, but Apple will have 85% of the capacity of the constellation. The constellation will be for direct-to-device communication with ordinary celphones. We're unsure of the business model for the new constellation but we believe it will be similar to the ASTS business model that wireless operators will use and pay for roaming. ASTS is a roaming partner and not a competitor to the wireless operators. 
 
We believe that the ATP order that MDA has is this contract. But we don't know definitively. MDA is currently building/completing satellites to build out a constellation for Globalstar for SOS mobile connectivity. So we believe MDA is the incumbent provider for satellites. 
 
We will have to wait for news and try to figure out who is building this constellation. 
 
We rate MDA a BUY with a target of $25.00.

[marcrobert]

pop continues BMO upgrade